Increasing The United Arab Bank’s Issued Capital

In order to comply with the Basel III requirements, in addition to the results of the Bank's stress test which was implemented in accordance with the requirements of the Central Bank of the UAE, the Senior Management has identified the Bank's need for an increase of AED [687,516,883] on the Bank's issued capital of 1.375.033.766 United Arab Emirates Dirham.

Accordingly, UAB's Board of Directors met on November 7, 2017 to discuss the implementation of a long term capital raising plan, where the capital increase of AED 687.516.883 million was approved by issuing shares to existing shareholders. Accordingly, the Senior Management was requested to obtain the regulatory approvals required for this matter, taking into consideration the completion of the capital raising process during the first quarter of 2018.

The following are the main benefits of the capital raising plan:

Maintain the ratio of the Tier 1 capital and total regulatory capital at rates above the minimum stipulated by the United Arab Emirates Central Bank

Application of IFRS 9

Supporting business growth for sustainable returns

Improve capital management and ensure that capital adequacy is maintained similar to other banks

The Rights Issue will be in respect of 687.516.883 newly issued Shares, to be issued at an issue price of AED 1.

The issuance of the New Shares pursuant to the Rights Issue will increase the Bank's issued share capital to 2,062,550,649 Dirhams, divided into 2,062,550,649 shares.

The Rights Issue will be conducted through the issue of tradable securities to registered shareholders of the Bank as at the close of business of the ADX on Sunday 11 February 2018 in the amount of 1 Rights for every (2) Shares held on such date.

Receiving bank: Subscriptions shall be received by the Receiving Bank Emirates NBD PJSC and its branches listed in the prospectus along with Main UAB Branches.

Important dates:

Date of publication of the invitation to subscribe for New Shares by way of Rights Issue: Tuesday 16 January 2018

Eligibility Date of Rights (record date): Tuesday 11 February 2018 for the registered shareholders of the Company on this date.

First day of trading in Rights on the ADX: Tuesday 13 February 2018

Last day of trading in Rights on the ADX: Tuesday 27 February 2018

Subscription Opening Date: Wednesday 21 February 2018

Subscription Closing Date: Wednesday 7 March 2018

Date of finalizing the allocation: Monday 12 March 2018

Date of finalizing the refund process: Thursday 15 March 2018

Important Note: Investors should hold an Updated ADX NIN

Important dates relevant to the methods of payment of the subscription amounts

Subscription application paid by way of cheque must be submitted by 12pm on 6th March 2018.Subscription applications received through FTS must be made before 12pm on 7th March 2018.

What is a rights issue? A Right is a financial instrument granted to all the existing shareholders of United Arab Bank on the eligibility date, being 11 February, which entitles each Right holder the right to subscribe for the newly issued shares.If you are a shareholder of United Arab Bank as of close of trading day on 11th of February 2018, you will be issued “rights”, which are tradable securities. Granting their holder the eligibility to subscribe for new shares in United Arab Bank. You will be issued 1 right for every 2 shares you own, and each such right entitles you to subscribe to one new share at a price of 1.00 Dirhams per new share. You may also sell these rights to other investors on the ADX during the rights trading period.

Is a Right different from a Share? Yes. The Right is an instrument that entitle its holder to subscribe for an equivalent number of shares. If the Right is not used or traded by the respective Right holder, the Right will lapse and shall have no value upon the expiration of the subscription period or the trading period, respectively.

Why is United Arab Bank raising funds through a rights issue? The Bank intends to use the net proceeds from the Rights Issue in order to strengthen the capital base of the Bank and to comply with the Central Bank capital adequacy requirements.

How much is United Arab Bank raising? United Arab Bank aims to raise AED 687.516.883 million of ordinary capital from the rights issue.

How will United Arab Bank shareholders be affected? Each shareholder of United Arab Bank will receive the right to subscribe for 1 new issued share for every 2 shares they own as of the rights eligibility date, which is 11 Feb 2018. Shareholders will be entitled to: (i) exercise their rights to subscribe for one new share at the issue price for each right held by them; (ii) trade their rights through a securities broker registered and licensed by the ADX; or (iii) take no action. The issue price of each new share is 1.00 Dirhams.

How do I subscribe for new shares? In order to exercise your rights and buy the new shares that United Arab Bank is offering you, you must subscribe by:

The rights holder can approach any of the collections branches and complete the subscription formalities. Rights holder can fund their subscription through:

a Manager’s Cheque favoring ‘United Arab Bank Rights Issue.

Transfer the funds thru UAEFTS mentioning a valid NIN (National Investor Number) in transaction details. The investor choosing the UAE FTS method will be required to provide their valid National Investor Number (NIN) along with the number of shares subscribed for in the special instructions field. Detailed remittance instruction for the Rights Issue will be available on the ADX website.

While visiting the receiving bank branch, you will need to provide NIN issued by ADX, copy of Emirates ID/Passport, Account Number to be debited/Manager’s cheque and number of share for subscription.

Can I subscribe to just some of the rights? Yes. You may decide to use a portion of your rights to buy new shares, and sell or do nothing with the rest of your rights.

Do I have to subscribe? It is for you, as a shareholder, to decide for yourself whether to subscribe. If you decide not to subscribe, you may sell your rights or do nothing with them. The rights will be tradable on the ADX from 13 Feb 2018 until 27 Feb 2018.

Can I sell my rights - can they be traded? Yes, a right is an option to buy shares - but you are not obligated to do so. You may decide that you do not want to exercise your rights to subscribe to some or all of the new shares that you are entitled to. In this case, you may sell some or all of your rights to another investor at their market value. In order to sell your rights, you should contact a broker registered and licensed by the ADX. The rights will be tradable on the ADX under the ticker "United Arab Bank-RI.” during the rights trading period, which runs from 13 Feb 2018 until 27 Feb 2018.

Can I subscribe to more shares than my rights allow? Yes. You can subscribe for more shares than your rights during the subscription period between 21st of Fenruary 2018 and the 7the of March 2018, where you will need to pay for the full number of shares you wish to subscribe for. If holders of rights do not exercise their rights to subscribe in full for all of the new shares, the remaining shares will be allocated to individuals or organizations that subscribed for a number of shares above their allocation, on a pro rata basis. There is no guarantee that you will receive the number of shares that you applied for, in which case you will receive a refund for the shares that you subscribed for, but did not receive.

If I apply for additional shares, am I guaranteed to receive them? While holders of rights can apply for additional shares, there is no guarantee that they will receive all of the shares that they applied for beyond what their rights allow. Additional shares remaining after the initial allocation will be distributed to holders of rights who applied for additional shares over and above what they are entitled to through the number or rights they hold, on a pro rata basis.

What happens if I don’t subscribe? If you choose not to exercise all of the rights you were issued to subscribe for new shares, your percentage ownership of United Arab Bank will decrease and you will suffer an immediate dilution in your interest in the Bank.

This is because, while the total number of shares of United Arab Bank will increase through its capital increase which will be implemented in connection with the rights issue, the number of shares that you own will not increase in the same proportion, unless you exercise all of the rights you were issued to subscribe for new shares. This will have implications - for example, your share of the total dividends paid by United Arab Bank will decrease, and your share of votes at shareholder meetings will decrease.

Can I subscribe to the rights issue if I am not a shareholder of United Arab Bank?Yes. You can buy rights to subscribe for United Arab Bank shares on the ADX during the rights trading period between the 13th and the 27th of February 2018. You can do this through an ADX-registered broker. Once you own the rights, you can subscribe to shares during the subscription period.

Can I subscribe if I am outside the UAE? The subscription will be open in UAE only to UAE, GCC, Non-GCC Individuals and Institutional subscribers.

UAE residents who are temporarily outside the UAE during the subscription period can subscribe either by giving someone else in the UAE a power of attorney to subscribe on their behalf or through the electronic subscription methods described above.

What are the key dates?

Rights eligibility date: 11 Feb 2018

Rights trading period:13 Feb 2018 until 27 Feb 2018

Subscription period: 21 Feb 2018 to 07 Mar 2018

Final allocation of new shares to be announced: 12 Mar 2018

The first key date is the rights eligibility date or the “date of record”. Any person holding United Arab Bank shares as at the close of business on 11 Feb 2018 will be issued with 1 right for every 2 shares held on such date. Such rights will be deposited into the clearing account or brokerage account of each such registered shareholder where his or her existing shares are held.

The second key date is the commencement of the rights trading period on 13 Feb 2018. During the rights trading period, the holders of rights will be able to sell their rights to other investors through the ADX. The rights trading period will last until 27 Feb 2018.

The third key date is the commencement of the subscription period on 21 Feb 2018, which is when holders of rights (being both shareholders and those who have purchased rights on the ADX during the rights trading period) can subscribe for the new shares. The subscription period will last until 07 Mar 2018.

The last key date is when the final allocation of new shares will be announced. United Arab Bank will allocate new shares on or around 12 Mar 2018. If you are not allocated all the shares you subscribed to, any excess subscription funds you have paid will soon thereafter refund to you by no later than 15 Mar 2018.